Policy Governance

The XLUR8 Educational and Research Foundation board operates using the Policy Governance* model, which was developed to allow boards to maintain accountability for organizational performance while focusing on providing visionary leadership around our ‘big-picture’ mission. With the recognition that delegation is a significant component of our accountability, the board maintains written documentation of expectations for ourselves, our organization, and our Chief Executive Officer (CEO)–our policies are the primary vehicle for recording these expectations, and they are monitored on a regular basis.

The relevance of this system stems from (1) the fact that a significant volume of information is required to fulfill our fiduciary duties; (2) the need to delegate authority in order to accomplish our organizational purpose; (3) the desire to ensure that our owners and stakeholders are well-served by organizational accomplishments.

The Policy Governance model is designed to allow the board to delegate with great clarity by completing three steps:

Expressing the expectations of the job being delegated.

Assigning the expectations with no ambiguity to the party who is to be held accountable for meeting them.

Checking that expectations were met.

We have four general categories of policies which express our expectations for ends to be achieved and the acceptable means by which to achieve them:

1 — Ends

Ends policies broadly state the desired organizational outcomes. They describe the ongoing priorities of what should be achieved and for whom. The CEO Officer is responsible for reporting on compliance with these policies once a year.

2 — Executive Limitations

The Executive Limitations state which situations and means are unacceptable and serve as constraints within which the CEO can act. The CEO develops a written report for the board on each of these policies on a regular basis throughout the year, and the board evaluates whether the interpretation was reasonable, and makes conclusions about whether the CEO is in compliance. If it is determined that we are not in compliance with our policies, the board discusses the reasons for this result and establishes parameters and expectations for achieving compliance within a set time frame. The board may require additional monitoring of the policy (on a more frequent basis) or even conclude that the policy needs to be revised.

3 — Governance Process

The Governance Process policies describe how the board is organized and its own process and products. The board evaluates its own compliance with these policies throughout the year.

4 — Board-Management Delegation

These policies describe how the board delegates to our sole employee, the CEO. The board evaluates its compliance with these policies throughout the year.

Our approach to crafting policies is to begin with broad statements regarding allowable and prohibited behavior, and make increasingly specific policies. For example, a policy which prohibits the CEO from violating the law provides a concise statement of expectation (and is a lot easier than trying to think of and then write down a list of all the illegal actions which could be undertaken!). A more specific policy might require that a certain level of insurance be carried to protect XLUR8’s property. We limit the level of detail in our written policies to that required for the board to accept any reasonable interpretation. This approach allows for the maximum flexibility and creativity within clearly established boundaries, and provides a system for delegation and accountability. (It helps also to have a manageable amount of policies–it would be much more difficult to monitor 200 pages of detailed policies! Furthermore, it keeps us out of the micro-managing realm so that we can focus on big picture questions.

The advantages of using a Policy Governance system are:

It enables the board to focus on the future, and provide high-level organizational leadership rather than focusing on day-to-day operational issues. (After all, if the board does not provide this type of leadership, who else could?)

By deciding on the larger issues about ends and means the board can maintain meaningful control of the organization while allowing others to decide on smaller issues.

The board can delegate genuine authority to others without failing in its own accountability–the parameters of delegated authority are clearly established by the board, allowing for decisive leadership by others.

Regular assessment of compliance with policy provides a systematic method for evaluating organizational performance because the board knows what to look for.

The board and its subordinates (e.g. its committees, the CEO) know what is required of them because expectations are clearly articulated. Since the design of jobs has already been decided, the board can distinguish the proper course of action when confronted by questions without having to spend time defining the nature of governance itself.

The board of directors exists for the sole purpose of ensuring, on behalf of our (legal and moral) owners, that the organization performs as it should. We must constantly evaluate our purpose–what change we want to occur for people and even the world outside of our organization–and our Ends–the accomplishments which justify our existence. This brings us to the most important question: what difference does having XLUR8 in the world make to you?

* The Policy Governance Model was developed by John Carver as a “theory-based integrated framework” for owner-accountable governance, with a structured board process to allow for a meaningful level of accountability while empowering the board to lead their organizations at the highest level. The term Policy Governance is registered and protected. Carver’s website address is: www.carvergovernance.com